9911796707
TMI Blog2006 (2) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... within four days and if the payment is not made within seven days then from 8th day onwards the dealer becomes liable to pay interest on the delayed payment. This indicates that there was an absolute sale made by the respondent to its dealers and the sale was on 'principal to principal basis'. Original authority as well as Commissioner (Appeals) had stressed upon the point that since the trade discount was not paid to the dealer at the time of the preparation of the invoice and was to be paid later based on the net sale value of the sale effected (½ per cent of the net sale value); that the agreement between the parties amounting to be an agency agreement and not the dealership agreement and the sale was not from principal to principal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand of Rs. 4,68,766/- relying upon a judgment of this Court in the case of M/s. Coromandel Fertilisers Limited v. Union of India Others reported in 1984 (17) E.L.T. 607 (S.C.) by disallowing the deduction in respect of commission amounting to Rs. 81,52,442/- paid to the dealers by the respondent-assessee attributable to their sale promotion activities as commission. It was further held that the deduction in respect of commission paid to the dealers was not permissible deduction as the appointed dealers were the selling agents of the respondent for sale of cotton yarn on behalf of the respondent. 4. Aggrieved by the aforesaid order, the respondent-assessee filed an appeal to the Commissioner (Appeals), New Delhi. The Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions placed in company's office at Delhi, Ex-company's Delhi Godown subject to availability of the stock with company in their said godown. 3. That the dealer shall be wholly and solely responsible for making full payment to the company of all stocks of Cotton Yarn received from the company. xx xx xx xx xx xx 8. That the company shall pay the dealer commission of 1.5% including brokerage, if any, on the net value of the sale. The commission payable shall be worked out at the end of every quarter and remitted to the dealer. 9. The dealer shall be paid ½% cash discount if cheque/pay order/draft is issued and handed over to company's staff by the dealer within one day of date of the sale invoice. The cash discount will be 0.25% if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn purchased by him forthwith and he is given half per cent cash discount if the payment is made within one day, 0.25 per cent if the payment is made within four days and if the payment is not made within seven days then from 8th day onwards the dealer becomes liable to pay interest on the delayed payment. This indicates that there was an absolute sale made by the respondent to its dealers and the sale was on 'principal to principal basis'. 10. This Court in Union of India Others v. Bombay Tyres International Pvt. Ltd. reported in 1984 (17) E.L.T. 329 (S.C.) on further arguments held trade discount to mean : "1. Trade Discounts - Discounts allowed in the Trade (by whatever name such discount is described) should be allowed to be ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Collector of Central Excise Nellore and Others reported in (1986) 1 SCC 125, where the assessee was manufacturing Mopeds and was paying commission to its dealers, held that irrespective of the fact that the amount allowed to the dealer has been referred to in the agreement as commission was in fact trade discount because the label given by the parties would not be determinative of the fact whether it is a trade discount or a commission paid to an agent. It was observed : "…..Now it is true that this amount allowed to the dealers has been referred to in the agreement as commission but the label given by the parties cannot be determinative because it is for the Court to decide whether the amount is trade discount or not, whatever be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o principal basis and in the circumstances it is difficult to see how the the amount of Rs. 110, 145 and 165 allowed to the dealers in respect of different varieties of mopeds could be regarded as anything other than trade discount. The appellants charged to the dealers the price of the mopeds sold to them less the amount of Rs. 110, Rs. 145 and Rs. 165 in respect of different varieties of mopeds. These amounts allowed to the dealers were clearly trade discount liable to be deducted from the price charged to the dealers for the purpose of arriving at the excisable value of the mopeds." 14. Counsel for the appellant-revenue has relied upon a judgment of this Court in Coromadel Fertilisers Limited (supra) on which reliance has also been pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
